Discontinued operations, stemming mainly from costs associated with the sale in October of its flexible packaging businesses, reduced net earnings by 5 cents a share.

Income from ongoing operations totaled $43 million, or 30 cents a share, compared with $42 million, or 28 cents, in the final quarter of 2004.

Revenue for the quarter ended Dec. 31 totaled $741 million, up 12% from $663 million in the year-ago period.

Analysts polled by Thomson First Call had predicted Pactiv would turn in a profit of 23 cents a share on sales of $708 million.

"Raw material costs were up sharply, and we faced difficulty with resin supply due to petrochemical outages from the Gulf Coast hurricanes," Richard Wambold, Pactiv's chairman and chief executive officer, said in a statement.

"Nevertheless, we managed the business to minimize the impact on customers and significantly lowered inventory, which we expect to replenish in the first quarter," he added.

Looking ahead, the company said it expects to see its sales increase 6% to 8% in 2006, yielding earnings of 19-23 cents a share in the first quarter. For the full year, the company said it sees earnings of $1.07 to $1.17 a share, including non-cash pension income of $26 million after tax, or 18 cents a share.

Prior to the report, Wall Street analysts said they were looking for full-year earnings from the Lake Forest, Ill.-based company of $1.17 a share.

Pactiv shares closed Monday ahead of the report at $21.89, a 21-cent loss for the session.

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